Texas Senate Bill 6 – Are major regulatory changes coming for large loads and behind-the-meter arrangements in ERCOT?

Requirements Addressing Transmission Cost Recovery

To address concerns around cost responsibility for the grid, SB6 would require the PUCT to create a new transmission charge based on noncoincident peak demand for all behind-the-meter customers. 

SB6 would require the PUCT to create new planning standards for large loads. These planning standards impose several new interconnection requirements on large loads, including:

• notice to transmission and distribution service providers (TDSPs) regarding pursuit of requests for electric service elsewhere that might impact the customer’s intent to proceed
• a flat fee of at least $100,000 for an initial transmission screening study 
• a determination of the extent of an interconnecting customer’s control over a site
• financial security before the TDSP may submit the project for ERCOT review

Requirements Addressing Reliability Concerns
To address reliability impacts, the new standards would require the large load to disclose any on-site backup generation facilities to ERCOT, which can then “direct” the TDSP serving the large load to “require” deployment of any on-site backup generation facility after reasonable notice to “achieve firm load shed during an energy emergency alert.” 

SB6 would require PUCT approval of net metering arrangements between generation resources and an unaffiliated retail customer if the customer’s peak demand exceeds 10% of the nameplate capacity of the generation resource unless the generation owner has “proposed to construct” an equal amount of replacement capacity elsewhere. The PUCT may also impose conditions on such an arrangement. In addition, the net metering arrangement must be either “requested or consented to” by the TDSP providing retail service. 

SB6 would require that for large loads taking transmission-voltage service, the TDSP install or require installment of equipment that allows remote disconnection of the large load during firm load shed conditions. 

Finally, SB6 would require ERCOT to create a new ancillary service to competitively procure demand reductions from large loads ahead of expected energy emergency alert events.

If you have any questions about this Legal Briefing, please feel free to contact any of the attorneys listed or the Eversheds Sutherland attorney with whom you regularly work.